RiverStone Holdings Limited to Acquire Neon from AFG

Transaction Overview

RiverStone Holdings Limited (“RiverStone”) has agreed to acquire GAI Holding Bermuda (“GAI”) Limited from AFG

  • Sale includes GAI’s subsidiaries comprising the legal entities that own AFG’s Lloyd’s of London insurer, Neon
    • Subsidiary entities also comprise four MGAs that GAI is in the process of exiting via sale, run-off or liquidation
  • Upon closing of the sale, AFG expects the release of all of its Funds at Lloyd’s (“FAL”)
  • This transaction will complete AFG’s exit from the Lloyd’s of London insurance market
  • The transaction is expected to close in the fourth quarter of 2020

Neon, founded initially as Marketform, was acquired by AFG in 2008 and rebranded as Neon in 2016

  • Neon operated as a live Managing Agency until being put into run-off by AFG in January 2020
  • At July 30, 2020 Neon had net claims reserves of £308m across casualty, reinsurance, marine, specialty and property

AFG is a U.S. based publicly traded insurance holding company

  • Based in Cincinnati, Ohio with roots back to the founding of its flagship company, Great American Insurance Company
  • Listed on the NYSE in 1978 and now trades with a market cap of ~$5.7bn
  • Engaged in property and casualty insurance, focusing on specialized commercial products, and in the sale of annuities
  • Approximately $70bn assets as of June 30, 2020

The RiverStone Group is a leading insurance services provider specializing in the management of legacy and run-off insurance businesses and portfolios

  • RiverStone forms part of Fairfax, a Canadian publicly traded financial holding company with a market cap of ~$7.7bn

TigerRisk Capital Markets & Advisory Role

TCMA is acting as exclusive financial advisor to AFG; key transaction steps led by TCMA include:

  • Running a broad auction process and preparation of marketing documentation
  • Offering insight around key transaction terms and conditions
  • Managing an organised and efficient due diligence process
  • Assistance to AFG in negotiation of final transaction terms
  • Providing objective advice and acting as a confidant to the seller throughout the process

TigerRisk’s LPT team also assisted in reviewing Neon’s reserves and helping to present them to the bidders